Water and Wastewater System Capital Cost Recovery Study

Overview

The City of Ann Arbor retained Black and Veatch, a nationally recognized engineering and management consulting firm, to perform a water and wastewater system capital cost recovery study. The study began in September 2014 and is now complete.

On March 21, 2016 City Council adopted Ordinance No. ORD-16-03 – Water and Sanitary Capital Recovery Charges. This ordinance adopts the recommendations from the Water & Sewer Capital Cost Recovery Study and a new fee schedule for connections made to the City's water and sanitary sewer systems. The effective date of the new fee schedule (PDF) is April 4, 2016. The ordinance also provides provisions for connections made from July 1, 2015 to April, 2016; the customer will receive a refund if the new fee schedule results in a lower amount.

Final Report

Executive summary of the report (PDF):

Therefore, the intent of this study is to establish an equitable, understandable, defensible cost recovery philosophy and charge structure for customers connecting to the City’s water main and/or sanitary sewer systems. The capital cost recovery charge calculations in this study use a recoupment (buy-in) approach that identifies the demand that new connections place on the City’s water and sanitary sewer systems. The demand units required per connection are multiplied by the cost per unit for each component of each utility system and summed to determine the gross charge. Debt service credits are then calculated and deducted from the gross charge to arrive at a net charge per water connection.

To calculate the charges, industry standards (those primarily endorsed by the American Water Works Association) and professional best practices were utilized. . . .

How do I know which charges apply to me?

Is the parcel part of a development that constructed its own main?
a. If yes, proceed to step 5.
b. If no, proceed to step 2.
Are you connecting to an EXISTING utility main built before 2004? Was the parcel, or parent parcel, part of the city before 2004?
a. If both yes, proceed to step 5.
b. If either no, proceed to step 6.
Are you connecting to an existing utility main built between 2004 and 2014?
a. If yes, proceed to step 6.
Are you connecting to a NEW utility main built after 2014?
a. If yes, you will pay an extension charge, in addition to a capital cost recovery charge with CREDIT.
You may be eligible for a capital cost recovery charge with CREDIT.
Full capital cost recovery charge applies.